Senator Schumer Calls For Federal Investigation Into Debt Collectors That Shake Down Relatives Of Deceased Debtors

I’ve recently pointed to a few stories about debt collectors chasing dollars after someone dies. Last week, the New York Times had a story titled: “You’re Dead? That Won’t Stop The Debt Collector (link here).” A month before that, I pointed to a story where Bank of America was chasing Paul Kelleher around, so that it could collect a debt that Paul’s recently-deceased mother, Theresa Hatt, had accrued (story here). Well, it turns out that Senator Charles Schumer doesn’t like what he’s hearing and reading. From a press release issued by Schumer’s office today (hat tip Lisa): Following a meeting with the new chairman of the Federal Trade Commission yesterday, U.S. Senator Charles E. Schumer (D-NY) on Wednesday urged a federal investigation into debt collection companies that pursue payments from relatives of deceased debtors, saying the practice appears to violate existing law. “These companies call surviving relatives, often shortly after the death of a loved one, to coax or cajole them into making payments on the deceased relative’s credit card. To say the least, this practice is distasteful and unethical. Moreover, this practice may very well violate the Fair Debt Collection Practices Act,” Schumer wrote in a letter sent Wednesday to FTC Chairman Jon Leibowitz. In the letter, Schumer requested an inventory of how many debt collection agencies engage in the practice, and which credit card issuers contract with debt collectors for this purpose. He asked for an explanation as to why the practice isn’t illegal under the Fair Debt Collection Practices Act, since that law prevents the collection companies from contacting anyone other than the debtor about outstanding bills. Finally, Schumer inquired whether, short of declaring the practice illegal, debt collectors could at least be required to notify the relatives they contact that they have no legal obligation to pay off the debt. Schumer’s action came on the heels of a high-profile published report last week exposing this practice, which is deceitful since relatives of deceased debtors are not required by law to assume their loved ones’ debts. But debt collection agencies conveniently omit this information as they seek to coax the relatives into making payments on the outstanding bills.